Telecommunications giant Verizon Communications Inc. is expanding its empire, acquiring early online trailblazer AOL Inc. and its stable of digital brands, including the Huffington Post and TechCrunch, for $4.4 billion.
In announcing the deal early Tuesday, Verizon said AOL would boost its wireless video offerings, online content and burgeoning world of Internet connected devices.
“AOL has once again become a digital trailblazer, and we are excited at the prospect of charting a new course together in the digitally connected world,” said Verizon Chief Executive Lowell McAdam.
Verizon will pay $50 per share to purchase AOL, a 17 percent premium over Monday’s closing price.
Originally known as America Online, AOL was one of the first subscription-fee, dial-up services in the early years of the commercial Internet in the 1990s.
With its email service, online chat rooms and news-filled home page, the company grew under then-Chief Executive Steve Case to become one of the Internet’s first success stories.
AOL became such a powerhouse during the dot.com boom that it acquired media giant Time Warner in 2000, forming AOL Time Warner Inc.
But the end of the boom hurt AOL, and it struggled to adapt as online access shifted to high-speed broadband connections offered by telecommunications firms such as Verizon and cable giants such as Comcast Corp., and search engines such as Google Inc. emerged as an alternative entry point to the World Wide Web.
In recent years, AOL has focused on becoming a digital media company. It moved its headquarters from Virginia to New York City and acquired popular online sites such as the Huffington Post, TechCrunch and Engadget. It also has produced online video programming, such as “The Future Starts Here” and “Park Bench with Steve Buscemi,” that earned Emmy nominations last year.
“The visions of Verizon and AOL are shared; the companies have existing successful partnerships, and we are excited to work with the team at Verizon to create the next generation of media through mobile and video,” said AOL Chief Executive Tim Armstrong.
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